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Silicon Valley’s AI boom is panicking locals in a rural corner of California

33 13
05.02.2026

Developers are descending on a rural desert community along California’s Mexican border, trying to build over $15 billion worth of data centers to power Silicon Valley’s artificial intelligence boom. 

But concerns over pollution and Colorado River water use have turned one of the projects into a charged legal fight, where a developer is accusing city officials in Imperial, California, of “economic sabotage” for circulating flyers about the development. Meanwhile, activists are warning that the projects are getting approved without protecting local residents.

Last year, developer CalEthos announced plans to turn 315 acres of farmland into a complex that could eventually be a $5.5 billion project, with the first phase including a 200,000-square-foot data center. A second company, Imperial Valley Computer Manufacturing LLC, proposed a $10 billion, 950,000-square-foot data center close to the city of Imperial, located near the Mexican border, roughly 90 miles east of San Diego. 

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A rendering of the 950,000-square-foot data center planned for Imperial County, along with the large substation to power the project. It would be six times the size of an average Costco.

Local critics have emerged, warning that building water- and energy-intensive data centers could have dire consequences with no guaranteed benefit to residents. Anahi Araiza, the head of policy and community research for Imperial Valley Equity and Justice, said her community group opposes both projects.

“We are one of the hottest places on earth,” Araiza told SFGATE over the phone. “It’s mind-boggling to believe that these projects won’t have an impact on our water and energy infrastructure or significantly contribute to air pollution and noise pollution.”

The Imperial Valley, located south of the Coachella Valley and stretching all the way to the border, is well positioned to power Silicon Valley’s AI boom. Data centers require huge amounts of power to run servers, as well as water to cool down the machines. The Imperial Valley has both and is in dire need of economic stimulus. 

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The valley sits on top of a vast deposit of geothermal energy that provides climate-friendly power, and infrastructure is already being built to extract this energy specifically for servers. A company recently announced plans to build a massive geothermal plant to power data centers. 

FILE: An aerial view of the shrinking Salton Sea, in Imperial County, Calif. 

The water required to cool data centers is also plentiful, at least for now. The valley has California’s largest........

© SFGate